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Alpha in Academia

@alphainacademia.bsky.social

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A curated newsletter featuring recent academic papers on financial markets, economics, and quantitative finance. Join the 6500+ subscribers: https://alphainacademia.substack.com/

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Alpha in Academia @alphainacademia.bsky.social · 6h

The recent surge in gold and cryptocurrencies to record highs has sparked claims that the U.S. "debasement trade" is in full swing, but the bond market tells a different story:

Alpha in Academia @alphainacademia.bsky.social · 1d

Credit indicators are turning bullish:

Alpha in Academia @alphainacademia.bsky.social · 2d

The market is pricing in more cuts than the FOMC is:

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Alpha in Academia @alphainacademia.bsky.social · 3d

Even with the collapse of First Brands and Tricolor (and the discussion around more cockroaches in the kitchen), Chapter 11 filings have been relatively stable:

Alpha in Academia @alphainacademia.bsky.social · 4d

Gold has given various cryptocurrencies a run for their money this year:

Alpha in Academia @alphainacademia.bsky.social · 5d

Rare earths play a crucial role in the mining of various cryptos.

Further tensions with China can have a substantial impact:

Alpha in Academia @alphainacademia.bsky.social · 7d

Interestingly, data center construction growth is slowing, despite all the talk about AI investment recently.

Alpha in Academia @alphainacademia.bsky.social · 11d

Many measures show that stocks are historically expensive. However, this measure, which looks at the median stock in the S&P 500, shows that stocks may not be that rich, overall.

Additionally, profit margins are much higher today than in 2000.

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Alpha in Academia @alphainacademia.bsky.social · 12d

Slow job growth, strong GDP. Torsten Slok believes this is due to slower foreign born job growth, AI productivity gains, and slower government job growth.

Are there other explanatory factors?

Alpha in Academia @alphainacademia.bsky.social · 13d

The yen carry trade is back - since the blowup last summer, the short yen / long peso carry trade has outperformed the S&P 500:

Alpha in Academia @alphainacademia.bsky.social · 14d

An interesting chart by Apollo’s Torsten Slok:

Alpha in Academia @alphainacademia.bsky.social · 15d

The historical tendency of equally-weighted (EW) stock indices to outperform their capitalization-weighted (CW) counterparts is shown to be linked to the degree of market concentration.

Alpha in Academia @alphainacademia.bsky.social · 15d

A modest 0.5°C rise in global temperatures induces a significant 0.65 percentage point increase in five-year-ahead inflation expectations.

A more dovish reading on an index that measures Fed tone precedes lower US Treasury bond yields across the curve.

Alpha in Academia @alphainacademia.bsky.social · 15d

Interesting findings from this week’s Recent Academic Research post:

During economic meltdowns, alternative investments like private equity and venture capital are strategic accelerators of recovery.

(more in comments)

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Alpha in Academia @alphainacademia.bsky.social · 17d

Earlier this year, I called out the high gold-silver ratio. Since then, the ratio has exhibited a traditional mean reversion:

Alpha in Academia @alphainacademia.bsky.social · 18d

The natural gas turbine industry is dominated by three major players. With the rising demand for energy, can suppliers keep up?

Alpha in Academia @alphainacademia.bsky.social · 19d

Once again, economic consensus is wrong for 2025. Over the past few years, economists have been overly pessimistic.

Alpha in Academia @alphainacademia.bsky.social · 20d

This is an interesting chart. Since the 1960s, consumer pessimism at this level either preceded a recession or came shortly after it:

Alpha in Academia @alphainacademia.bsky.social · 20d

In our most recent post, we explore the use of forecasting models in prediction markets. Specifically, we looked to see if there was opportunity in the initial jobless claims Kalshi market.

Alpha in Academia @alphainacademia.bsky.social · 21d

The Fed’s model for the US economy finds that a 10% depreciation in the dollar results in a 0.3% boost to inflation:

Alpha in Academia @alphainacademia.bsky.social · 26d

I do agree with you. However, for most of U.S. history before the modern income tax was created in 1913, the federal government relied heavily on customs duties, so tariff revenue was far greater than income tax revenue (which either didn’t exist or was minimal). To be fair, spending was also lower.

Alpha in Academia @alphainacademia.bsky.social · 26d

The rally in gold is the greatest since stagflation in the late 70s.

Alpha in Academia @alphainacademia.bsky.social · 27d

Will PE rebound if we enter a full cutting cycle? Or is the space too competitive?

Alpha in Academia @alphainacademia.bsky.social · 28d

The $100,000 fee for H1B visas only affects new visas. How will this impact hiring among the largest tech firms?

Alpha in Academia @alphainacademia.bsky.social · 29d

An interesting chart by Apollo. Can tariff revenue offset or replace income taxes?